Mainland China installed more solar- and wind-power capacity in 2020 than expected and we forecast further acceleration over 2021-25 as the country implements its new Five-Year Plan.
Some 48GW of solar capacity was added last year compared 30GW in 2019, when the market had expected only 40GW. And the 72GW for wind capacity, up from 26GW the previous year, was more than double expectations.
However, the China Electricity Council had previously reported that wind capacity had grown by only 25GW during the first 11 months of 2020, implying that 47GW was added in December alone.
It seems the record addition in wind installation was driven by an investment rush by utility and energy companies to meet tariff deadlines for onshore wind projects by the year end. December’s big jump was likely caused by rushed connection of wind farms that were built but not prioritised for operation because of insufficient energy demand or because they were waiting for government approval.
But there was also a change in how the government calculates installation: partly constructed wind farm projects are now included in their entirety for COVID-19 reasons.
Installed wind capacity was an accumulated 236GW at the end of 2019 but grid-connected capacity was just 210GW, implying 26GW was built but not counted as connected capacity. This discrepancy could mean wind capacity that was built and connected was only about 50GW in 2020 – though that is still significantly higher than 2019.
The distorted base effect means the reported increase in 2021 may be lower than last year, but demand and new construction, in line with the country’s heightened climate commitment, means we still expect growth. Mainland China is aiming to achieve carbon neutrality by 2060.
We were previously expecting 30-60GW a year of new wind-power capacity in mainland China for 2021-25 but have now increased our forecast to 45-65GW a year. And our forecast for new solar installations has been raised from 45-85GW a year to 55-85GW.
Globally, we now forecast new solar installations at 154-215GW over 2021-25 reflecting a more robust view on a demand recovery as countries turn their climate pledges into actions.
First published 25 January 2021.
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The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Evan Li
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